COMMISSIONER OF INCOME TAX Vs. JAGSON INTERNATIONALS LTD

JUDGEMENT

(1.) The grievance of the Appellant/Revenue in this appeal is in a very limited sphere. The claim of the Assesses for depreciation on the aircraft was disallowed by the Assessing Officer (AO) on the ground that the said aircraft was grounded in the relevant assessment year and was not put to use. Therefore, there is no question of allowing any depreciation thereupon. In the process, the AO also noted that the Assesses had given the said aircraft on lease and even the lease rental was not charged and the Assesses had granted moratorium in respect thereof. The Income Tax Appellate Tribunal has allowed the depreciation, inter alia, observing that there was no finding of the AO that during the entire year, the aircraft was not put to use. In these circumstances, it is the argument of the learned Counsel for the Revenue that the matter could have been remitted back to the AO to record the finding thereupon.

(2.) The Respondent/Assesses on the other hand pleads that the order of the Tribunal is perfectly justified. In order to appreciate the aforesaid contention of the parties, we would like to take note of the facts of the case in brief.

(3.) The Assesses is a public limited company. It furnished its return of income declaring an income of Rs. 3,14,46,353/- after claiming depreciation, inter alia, of a sum of Rs. 1,86,60,752/- including a sum of Rs. 43,57,834/-, on the Aircrafts, deduction of which had been disallowed by the Assessing Officer, on the ground that it did not receive any lease rent, in respect of Aircraft leased by it to its related company namely M/s Jagson Airlines Ltd. and thus he held that the company had not put the Aircraft to use and disallowed the claim of depreciation observing as under: